Diaspora (social network)

Diaspora (currently styled diaspora* and formerly styled DIASPORA*) is a nonprofit, user-owned, distributed social network that is based upon the freeDiaspora software. Diaspora consists of a group of independently owned nodes (called pods) which interoperate to form the network. As of March 2014, there are more than 1 million Diaspora accounts.[1]

The social network is not owned by any one person or entity, keeping it from being subject to corporate take-overs or advertising. In September 2011 the developers stated, “…our distributed design means no big corporation will ever control Diaspora. Diaspora* will never sell your social life to advertisers, and you won’t have to conform to someone’s arbitrary rules or look over your shoulder before you speak.”[2]

Diaspora software development is managed by the Diaspora Foundation, which is part of the Free Software Support Network (FSSN). The FSSN is in turn run by Eben Moglen and the Software Freedom Law Center. The FSSN acts as an umbrella organization to Diaspora development and manages Diaspora’s branding, finances and legal assets.[3]

Contents

The Diaspora social network is constructed of a network of nodes, or pods, hosted by many different individuals and institutions. Each node operates a copy of the Diaspora software acting as a personal web server. Users of the network can host a pod on their own server or create an account on any existing pod of their choice, and from that pod can interact with other users on all other pods.[4][5][6]

Friendica instances are also a part of the Diaspora social network through the Friendica Diaspora connector.[7]

Diaspora users retain ownership of their data and do not assign ownership rights. The software is specifically designed to allow users to download all their images and text that has been uploaded at any time.[2]

The Diaspora software allows user posts to be designated as either “public” or “limited”. In the latter case, posts may only be read by people assigned to one of the groups, termed aspects, which the user has approved to view the post. Each new account is assigned several default aspects – friends, family, work and acquaintances – and the user can add as many custom aspects as they like.[8] It is possible to follow another user’s public posts without the mutual friending required by other social networks.[9] Users can also send private messages, called conversations.[10] A user can filter their news stream by aspect.[8]

The developers consider the distributed nature of the network crucial to its design and success:[2]

Diaspora’s distributed design is a huge part of it. Like the Internet itself, Diaspora* isn’t housed in any one place, and it’s not controlled by any one entity (including us). We’ve created software that lets you set up and run your own social network on your own “pod” (or server) and connect your network to the larger Diaspora* ecosystem. You can have a pod all to yourself, or one for just you and your friends, or your family, giving you complete ownership and control over your personal social information (including your identity, your posts, and your photos) and how it’s all stored and shared. Or you can simply … sign up at one of [the] open pods.[2]

The distributed design attracted members of the militant Islamist extremist group ISIS after their propaganda campaigns were censored by Twitter.[11][12][13][14] Diaspora developers issued a statement urging users to report offensive content, but due to the design of the service were unable to block content without the approval of pod admins.[15]

Posts in Diaspora can include hashtags and ‘mentions’ (a username preceded by a @ symbol). Users can upload photos to posts, and can format text and links using Markdown. Posts can be propagated to connected accounts on Facebook, Twitter and Tumblr. Diaspora supports embedding of media from YouTube, Vimeo and a number of other sites, and also supports OpenGraph previews.[10]

Grippi, Salzberg, Sofaer, and Zhitomirskiy started the Diaspora project after being motivated by a February 5, 2010 speech by Columbia University law professor Eben Moglen. In his speech, delivered to the Internet Society‘s New York Chapter, “Freedom in the Cloud”, Moglen described centralized social networks as “spying for free.”[6][17] In a New York Times interview, Salzberg said “When you give up that data, you’re giving it up forever … The value they give us is negligible in the scale of what they are doing, and what we are giving up is all of our privacy.” Sofaer said, “We don’t need to hand our messages to a hub. What Facebook gives you as a user isn’t all that hard to do. All the little games, the little walls, the little chat, aren’t really rare things. The technology already exists”.[6] However, Salzberg has said that “Facebook is not what we are going after”.[18]

The group decided to address this problem by creating a distributed social network. To obtain the necessary funds the project was launched on April 24, 2010 on Kickstarter, a crowd funding website. The first 39 days were assigned to raise the US$10,000 that they estimated would be needed to get started. However, the initial funding goal was met in just 12 days and the project eventually raised more than US$200,000 from more than 6000 backers (making it the second most successful Kickstarter project of its time).[19] Grippi said, “We were shocked. For some strange reason, everyone just agreed with this whole privacy thing.” Among the donors was Facebook CEO Mark Zuckerberg who contributed an undisclosed amount, saying “I donated. I think it is a cool idea.”[6][20][21][22]

“Diaspora is trying to destroy the idea that one network can be totally dominant,” stated Sofaer in laying down the aim of Diaspora.[20]

Work on the Diaspora software began in May 2010. Finn Brunton, a teacher and digital media researcher at New York University, described their method as “a return of the classic geek means of production: pizza and ramen and guys sleeping under the desks because it is something that it is really exciting and challenging.”[6] A developer preview was released on September 15 and received criticism for various security bugs.[23]

The first Diaspora “pod” was launched by the development team on November 23, 2010; as a private, invitation-only alpha.[24]

In December 2010 ReadWriteWeb named the project as one of its Top 10 Start-Ups of 2010, saying “Diaspora certainly represents the power of crowd funding, as well as an interest in making sure the social Web is not centralized in one company”.[21] On 7 January 2011 Black Duck Software named the project one of its Open Source Rookies of 2010, for being “the privacy aware, personally controlled, do-it-all, open source social network”.[25]

In September 2011, although the network and its software was still in alpha, Terry Hancock of Free Software Magazine described it as “already quite usable for some purposes”. While it supported text, photographs, and links, it still lacked some features, including link preview, the ability to upload or embed videos (although videos could be linked to on other services) and chat. Animated GIFs were supported, however.[5]

Since its release, features of Diaspora have appeared in similar forms in other social networks.[26] In a September 2011 message the developers noted similarities such as Google+‘s “circles” (a version of Diaspora’s aspects) and new sets of user privacy controls implemented by Facebook. They said “we can’t help but be pleased with the impact our work has had”. His supposition that Google borrowed heavily from Diaspora was a particular point of pride for Zhitomirskiy, although Google denied that Diaspora had influenced their designs.[20][27]

In October 2011, Diaspora announced that it was starting a fundraising campaign. Maxwell Salzberg explained, “The key right now is to build something that our community wants to use and that makes a difference in our users’ lives. In the future, we will work with our community to determine with them how we could best turn Diaspora* into a self-sustaining operation.” Within days of commencing the campaign over US$45,000 had been raised when PayPal froze Diaspora’s account without explanation. After a large number of complaints to PayPal from Diaspora users and the threat of legal action, the account was unfrozen with an apology from a PayPal executive, but still without explanation. This incident prompted the acceptance of other payment processors, including Stripe and Bitcoin.[28][29][30][31]

The Diaspora Project website was started on September 29, 2011.[32] Its declared mission is “to build a new and better social web, one that’s 100% owned and controlled by you and other Diasporans.”[2]

On November 12, 2011 co-founder Zhitomirskiy committed suicide, at the age of twenty-two. Reports linked pressures related to Diaspora to his death.[20][33][34][35]Zhitomirskiy’s mother, Inna Zhitomirskiy, said, “I strongly believe that if Ilya did not start this project and stayed in school, he would be well and alive today.”[20]

In February 2012 the developers wrote that their own research indicated a change in the focus for the project. They stated that, unlike other social networking websites, on which users mostly interact with people they know in real life, on Diaspora users mostly interact with people from all over the world whom they do not know. Whereas traditional social media mostly deals with user’s trivial daily details, much of the traffic on Diaspora deals with ideas and social causes. As a result, the developers decided to make changes to the interface to better facilitate more lengthy and detailed conversations on complex subjects as the project progresses towards beta status.[36]

In August 2012, the remaining founders formally handed the project over to its community.[37] Since that date, Diaspora has been fully developed and managed by its community members. The focus of the community development team has been on creating stable software releases to act as a basis for further development, which included adopting a semantic versioning system for releases, improving the performance of data federation between pods, and enabling as many volunteers as possible to write code for the project. The project has also adopted the Loomio platform to enable democratic group decision-making.[3]

On September 14, 2011 Terry Hancock of Free Software Magazine endorsed the Diaspora network in an article entitled, Why You Should Join Diaspora Now, Like Your Freedom Depends On It, calling it “good enough” for mainstream use. In explaining his reasoning for encouraging people to sign up he stated:[5]

With all of the concerns over who controls the “Social Web” (We’ve addressed some of these problems before in Free Software Magazine) – regarding the Google+ name policy and other privacy issues, Facebook’s questionable ethics, and the overall danger of controlled networks. I think it is extremely important for a more decentralized, more democratic, more open, and more free solution to succeed in the interest of personal freedom on the internet. And it looks to me like Diaspora is an essential part of that solution, so I’m endorsing it now, even though it’s not entirely “ready”.[5]

On November 14, 2011 Suw Charman-Anderson wrote in firstpost.com, in connection to Zhitomirskiy’s death, about why Diaspora’s slower growth can be an advantage:[38]

One key difference, however, is in number of users. Google+ has 40 million, whereas Diaspora has just 180,000 users, in part because the service is still in alpha testing. This might actually work to Diaspora’s advantage in the long run as it will have more time to build a sense of community. Experience shows us that online communities that grow too fast fragment and can become fractious as different groups clash over what kind of behaviour they think should be allowed.[38]

Diaspora was nominated for “Best Social Network” in the 2011 Mashable.com Awards.[39]

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Hackerspace

A hackerspace (also referred to as a hacklab, makerspace or hackspace) is a community-operated workspace where people with common interests, often in computers, machining, technology, science, digital art or electronic art, can meet, socialize and collaborate.[1]Hackerspaces have also been compared to other community-operated spaces with similar aims and mechanisms such as Fab Lab, men’s sheds, and commercial “for-profit” companies such as TechShop.

In general, hackerspaces function as centers for peer learning and knowledge sharing, in the form of workshops, presentations, and lectures. They usually also offer social activities for their members, such as game nights and parties. Hackerspaces can be viewed as open communitylabs incorporating elements of machine shops, workshops, and/or studios where hackers can come together to share resources and knowledge to build and make things.[2]

Hackerspaces with open membership became common throughout Germany in the 1990s in the orbit of the German Chaos Computer Club (CCC), with the c-base being probably an example. The concept, however, was limited to less than a dozen spaces within Germany, and did not spread beyond borders at first. Most likely this was because initial founding costs were prohibitive for small groups without the support of a large organization like the CCC.

In 2006, Paul Bohm came up with a fundraising strategy based on the Street Performer Protocol to build Metalab in Vienna, Austria, and became its founding director. In 2007, he and others started Hackerspaces.org, a wiki-based website that maintains a list of many hackerspaces and documents patterns on how to start and run them. As of September 2015, the community list included 1967 hackerspaces with 1199 active sites and 354 planned sites.[3]

The advent of crowdfunding and Kickstarter has put the tools required to build hackerspaces within reach of an even wider audience. Those tools are for example used by Bilal Ghalib, who had previously worked on a hackerspace documentary, and others to bring the hackerspace concept to the Middle East.[4]

Most recent studies of hackerspace in China — where Internet access is heavily censored — suggest that new businesses and organized tech conferences there serve to intervene in the status quo “from within”. The first hackerspace in China, Xinchejian,[5] opened in Shanghai in 2010. Thereafter a network of hackerspaces emerged, nourishing an emerging maker culture. By designing open technologies and developing new businesses, Chinese makers make use of the system, make fun of it, altering it and provoking it. DIY makers often bring and align contradictory ideas together, such as copycat and open source, manufacturing and DIY, individual empowerment and collective change. In doing so, they craft a subject position beyond the common rhetoric that Chinese citizens lack creativity. As a site of individual empowerment, hackerspace and DIY making enable people to remake the very societal norms and material infrastructures that undergird their work and livelihood.[6]

An artist gives a tour of one of the two machine shops in Xanadu, a makerspace under the aegis of Burning Man in Boise, Idaho which is open to all.

Makerspace layout

The specific tools and resources available at hackerspaces vary from place to place. They typically provide space for members to work on their individual projects, or to collaborate on group projects with other members. Hackerspaces may also operate computer tool lending libraries,[7] or physical tool lending libraries.

The individual character of a hackerspace is determined by its members. Many hackerspaces are governed by elected boards selected by active members in good standing. Elected officers may serve predetermined terms, and help direct decisionmaking with regards to purchasing new equipment, recruiting new members, formulating policy, conforming to safety requirements, and other administrative issues.

Membership fees are usually the main income of a hackerspace, but some also accept external sponsors. Some hackerspaces in the US have 501(c)3 status (or the equivalent in their jurisdiction), while others have chosen to forgo tax exempt status.[9]University-affiliated hackerspaces often do not charge an explicit fee, but are generally limited to students, staff, or alumni, although visiting guests from other hackerspaces are usually welcome. Some hackerspaces accept volunteer labor in lieu of membership fees, especially from financially limited participants. In addition, some hackerspaces earn income from sponsoring and staffing high-tech flea markets, where members of the general public may buy and sell new and used equipment and supplies.

There is a loose, informal tradition at many hackerspaces of welcoming visitors from other similar organizations, whether across town or internationally. Free exchange of ideas, skills, and knowledge are encouraged, especially at periodic gatherings sometimes called “build nights” or “open house” days.

Hackerspaces are widely defined on hackerspaces.org as “community-operated physical places, where people can meet and work on their projects”. The exact functioning of the space varies from place to place and is determined by its members and while there is no blueprint or set of guidelines to create a hackerspace, they generally follow a “hacker ethic”,[10] which “include freedom, in the sense of autonomy as well as of free access and circulation of information; distrust of authority, that is, opposing the traditional, industrial top-down style of organization; embracing the concept of learning by doing and peer-to-peer learning processes as opposed to formal modes of learning; sharing, solidarity and cooperation”.[11]

Hackerspaces can run into difficulties with building codes or other planning regulations, which may not be designed to handle their scope of activities. For example, a new hackerspace in Nashua, New Hampshire was shut down by the city after an inspection in 2011. The main issues involved ventilation of heat and toxic fumes; the space was reopened after improvements were made to the building.[12]

Over the years, many hackerspaces have grown significantly in membership, operational budgets, and local media attention. Many have also helped establish other hackerspaces in nearby locations.

The Geek Group, formed in 1994, is a budding nonprofit hackerspace in Grand Rapids, Michigan that has a large following and internet presence. There are various chapters around the United States. Their main focus has been as an opensource hackerspace to increase STEM education accessibility and one day become an accredited institution of higher education.

c-base (1995) from Berlin is recognized as one of the first independent, stand-alone hackerspaces in the world, not affiliated with a school, university, or company. Wired writes that “European groups, particularly in Germany, have a long tradition of this kind of activity”.[15] Another known German hackerspace is RaumZeitLabor, organizer of Trollcon.[16]

In 1997/98 The Lane Cove Community Men’s Shed in Australia was set up to provide a substitute space for “shedless blokes”. Initial establishment was assisted with a Commonwealth grant from the Department of Health & Aged Services under the “Healthy Seniors Grant Programme

Metalab, founded in 2006, is generally considered to have pioneered the funding principles that enabled rapid spread of the concept.[17]

TechShop is the first chain of commercial hackerspaces. It was launched in October 2006. As of October 2012, there were six TechShop locations in the US: three in California and one each in North Carolina, Michigan, and Texas, the last a partnership with the Lowe’s home improvement chain.

In August 2007, a group of North American hackers visited Europe “to get a sense for the potential of European ‘hacker spaces'”, and upon their return, the groups NYC Resistor and HacDC were set up in late 2007, with Noisebridge following in fall 2008.[15][18]

The first Chinese hackerspace Xinchejian was established in Shanghai in the fall of 2010. Thereafter hackerspaces have grown in numerous cities including Beijing, Shenzhen, Ningbo, Hangzhou and Guangzhou. Chinese makers became internationally visible when the first Maker Carnival was hosted in Beijing in 2012.[22]

There are over 1,000 active men’s sheds in Australia, Scotland, England, Ireland, Finland, and Greece, as of 2012.[23] Instead of seeing themselves as “hackers” they describe themselves as “shedders” and their activities as “shedding”. The Men’s Sheds Movement is many ways parallel hackerspaces in their aims; although open to anyone regardless of age or gender, they tend to advertise themselves as “men in sheds”. In some ways they can be seen as the flip side of working men’s clubs, as their community is drawn from a similar age group and their original aims are similar: to provide recreation and education for working class men and their families.

Seattle Attic was founded in the summer of 2013, as a response to the misogyny shown by the brogrammer culture that sees hackerspaces as ‘male’ spaces, and was the first Feminist Hackerspace in the United States[24][25] soon followed by Double Union, in San Francisco.[26] Their founding came as a result of The Ada Initiative, and their AdaCamp conferences. Which has also lead to the formation of FouFem in Montreal, the Mz Baltazar’s Laboratory, a start-up organization and feminist hackspace in Vienna, the Anarchafeminist Hackerhive in San Francisco, the Hacktory in Philadelphia and the Miss Despionas in Tasmania, Australia [27]

HackerSpaces have also begun to enter into public schools in the US. The first high school to open a true MakerSpace was in Sebastopol, California,[when?][citation needed] and now even middle schools are starting to follow the trend. White Hill Middle school in Fairfax, California has now opened up their own MakerSpace with a class called “Makers and Hackers”.[28]

Public Library Hackerspaces. There is contention about whether Chattanooga’s 4th floor was the first use of a library a laboratory and playground for the entire community. The User Experience (UX) is a public laboratory and educational facility.[29][30] Or according to Forbes The first public library to open a MakerSpace is the Fayetteville Free Library and is located in New York State.[31]

Columbus Idea Foundry moved into a 65,000-square-foot factory in Columbus Ohio on May 22, 2014.[32] They offer classes, host events, and have 66,000 pounds of tools.[33] By one account, it is “the country’s largest such space.”[34]

SplatSpace: Durham‘s HackerSpace is a non-profit 501(c)(3) organization,[35] established in 2010 is the longest established hackerspace in the Triangle and RTP areas of North Carolina. The space serves as a hub for the local maker community, providing access to 3D-printers, metal and wood working tools, and a workspace for local groups.

Inventoría in Costa Rica[36] is located just outside the campus of the University of Costa Rica. It is presented as a citizen’s science and technology innovation lab. Inventoría is managed by a local foundation along with the University of Costa Rica.

Fab lab

A fab lab is generally equipped with an array of flexible computer-controlled tools that cover several different length scales and various materials, with the aim to make “almost anything”.[3] This includes technology-enabled products generally perceived as limited to mass production.

While fab labs have yet to compete with mass production and its associated economies of scale in fabricating widely distributed products, they have already shown the potential to empower individuals to create smart devices for themselves. These devices can be tailored to local or personal needs in ways that are not practical or economical using mass production.

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The fab lab program was initiated to broadly explore how the content of information relates to its physical representation and how an under-served community can be powered by technology at the grassroots level.[4] The program began as a collaboration between the Grassroots Invention Group and the Center for Bits and Atoms at the Media Lab in the Massachusetts Institute of Technology with a grant from the National Science Foundation (Washington, D.C.) in 2001.[5]

Vigyan Ashram in India was the first fab lab to be set up outside MIT. It is established in 2002 and received capital equipment by NSF-USA and IITK

While the Grassroots Invention Group is no longer in the Media Lab, The Center for Bits and Atoms consortium is still actively involved in continuing research in areas related to description and fabrication but does not operate or maintain any of the labs worldwide (with the excmobile fab lab). The fab lab concept also grew out of a popular class at MIT (MAS.863) named “How To Make (Almost) Anything”. The class is still offered in the fall semesters.

One of the larger projects undertaken by fab labs include free community FabFi wireless networks (in Afghanistan, Kenya and the US). The first city-scale FabFi network, set up in Afghanistan, has remained in place and active for three years under community supervision and with no special maintenance. The network in Kenya, (Based in the University of Nairobi (UoN)) building on that experience, started to experiment with controlling service quality and providing added services for a fee to make the network cost-neutral.

MIT maintained a listing of all official Fab Labs, worldwide, until 2014. Nowadays listing of all official Fab Labs maintained by community using site fablabs.io. As of October 2016 there were 713 in the world in total.[7] Currently there are Fab Labs on every continent except Antarctica.

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On December 5th, 2015,Crypto-developer Chris Ellis dedicated 12 hours to building full Bitcoin nodes using all open source materials. These videos, presented by the World Crypto Network called, “Not (Just) Made In China,”show Ellis creating some full nodes during the broadcast for his ProTip fundraiser. The funding effort located on StartJOIN will help fund his project ProTip, which is a web browser that enables an array of micropayment options. Ellis isn’t creating these full nodes to compete with 21inc but merely to empower individuals to do it themselves. full article https://news.bitcoin.com/developer-chris-ellis-builds-full-bitcoin-nodes-12-hours/

Contents

Litecoin was released via an open-sourceclient on GitHub on October 7, 2011 by Charles Lee, a former Googleemployee.[5] It was a fork of the Bitcoin-Qt client, differing primarily by having a decreased block generation time, increased maximum number of coins, different hashing algorithm (scrypt, instead of SHA-256[6]), and a slightly modified GUI.

During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours.[7]

Litecoin reached a $1 billion marketcap in November 2013.[8] As of February 2016, its market capitalization is US$136,512,971 with the price at $3 levels.[9]

Litecoin version 0.8.5.1 was released in November 2013. The release included fixes for vulnerabilities and added enhanced security to the Litecoin network.

The Litecoin developer team released version 0.8.6.1 in early December 2013. The new version offered a 20x reduction in transaction fees, along with other security and performance improvements in the client and network. The source code and binaries were released early to people in the “#litecoin” IRC channel, on the official Litecoin forums, and on Reddit, with information for power users to add a Litecoin supernode to the configuration file, while the main site was to be updated after enough of the network was running the new version. This release method was used to ensure that the low fee transactions from version 0.8.6.1 clients would not be delayed by clients running older versions.

In April 2014, a new version of Litecoin was released, version 0.8.7.1, which fixed some minor issues along with an important fix related to the Heartbleed security bug.

The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin’s 10 minutes, which its developers claim allows for faster transaction confirmation.[2][10] A drawback is a higher probability of orphaned blocks. Advantages can include greater resistance to a double spending attack over the same period as bitcoin. However, total work done is a consideration. For example, if the Litecoin Network has comparatively ten times less computing work done per block than the bitcoin network, the bitcoin confirmation is around ten times harder to reverse, even though the Litecoin Network is likely to add confirmation blocks at a rate four times faster.

The Litecoin Network will produce 84 million Litecoins, or four times as many currency units as will be issued by the Bitcoin Network.

The original intended purpose of using Scrypt was to allow miners to mine both Bitcoin and Litecoin at the same time.[5] The choice to use scrypt was also partially to avoid giving advantage to video card (GPU), FPGA and ASICminers over CPU miners; although Charlie Lee has never publicly agreed with this opinion.

Due to Litecoin’s use of the scrypt algorithm, FPGA and ASIC devices made for mining Litecoin are more complicated to create and more expensive to produce than they are for bitcoin, which uses SHA-256.[12]This is widely due to the Scrypt hashing scheme being more memory intensive; increasing memory requirements for ASICs and FPGAs. However, as of December 2015, ASIC miners are widely available and the primary method of mining Litecoin.[citation needed]

A peer-to-peer network similar to bitcoin‘s handles Litecoin’s transactions, balances and issuance through scrypt, the proof-of-work scheme (Litecoins are issued when a small enough hash value is found, at which point a block is created, the process of finding these hashes and creating blocks is called mining). The issuing rate forms a geometric series, and the rate halves every 840,000 blocks, roughly every four years, reaching a final total of 84 million LTC.

Litecoins are currently traded primarily for both fiat currencies and other cryptocurrencies, mostly on online exchanges. To avoid the danger of chargebacks, reversible transactions, such as those with credit cards, are not normally used to buy litecoins as Litecoin transactions are irreversible.

Litecoin transactions are recorded in the Litecoin blockchain (a ledger held by most clients). A new block is added to the blockchain roughly every 2.5 minutes (whenever a small enough hash value is found for the proof-of-work scheme). A transaction is usually considered complete after six blocks, or 15 minutes, though for smaller transactions, fewer than six blocks may be needed for adequate security.

The most common Wallet available today is “Litecoin Core” for Linux, Windows and Mac OS. Litecoin Core is an offline wallet based on the Bitcoin Core wallet.

On January 19, 2014, the Litecoin Android wallet was released. This new release replaces the old Android client which contained major security issues.

A new Litecoin Electrum client — a lightweight wallet for Litecoin — was released for beta testing on April 10, 2014. As with other Litecoin Dev projects, the client is based on the bitcoin source and the Litecoin developers fix issues upstream in order to make it easier to keep the Litecoin version updated. As with the Litecoin Android wallet, this new version of Electrum for Litecoin replaces the old and unsupported version created in the first year of Litecoin’s release.

As of February 2015 there are many exchanges that deal with Litecoin. Although some exchanges allow only trading between litecoins and bitcoins, many exchanges provide trading between litecoins and US dollars (247exchange, Bitfinex, BTC-e, OKCoin, BitBay), Euros (Kraken, Yacuna), and Chinese Yuan (Huobi, BTC China, OKCoin).[13]

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12.5 bitcoins per block (approximately every ten minutes) until mid 2020,[2] and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued.

Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This activity is called mining and miners are rewarded with transaction fees and newly created bitcoins.[13] Besides being obtained by mining, bitcoins can be exchanged for other currencies,[27] products, and services.[28] When sending bitcoins, users can pay an optional transaction fee to the miners.[29]

In February 2015, the number of merchants accepting bitcoin for products and services passed 100,000.[30] Instead of 2–3% typically imposed by credit card processors, merchants accepting bitcoins often pay fees in the range from 0% to less than 2%.[31] Despite the fourfold increase in the number of merchants accepting bitcoin in 2014, the cryptocurrency did not have much momentum in retail transactions.[32] The European Banking Authority[33] and other sources[13]:11 have warned that bitcoin users are not protected by refund rights or chargebacks. The use of bitcoin by criminals has attracted the attention of financial regulators,[34] legislative bodies,[35] law enforcement,[36] and media.[37] Criminal activities are primarily centered around darknet markets and theft, though officials in countries such as the United States also recognize that bitcoin can provide legitimate financial services.[35]

The blockchain is a public ledger that records bitcoin transactions.[43] A novel solution accomplishes this without any trusted central authority: maintenance of the blockchain is performed by a network of communicating nodes running bitcoin software.[13] Transactions of the form payer X sends Y bitcoins to payee Z are broadcastto this network using readily available software applications.[44] Network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes. The blockchain is a distributed database – to achieve independent verification of the chain of ownership of any and every bitcoin (amount), each network node stores its own copy of the blockchain.[20] Approximately six times per hour, a new group of accepted transactions, a block, is created, added to the blockchain, and quickly published to all nodes. This allows bitcoin software to determine when a particular bitcoin amount has been spent, which is necessary in order to prevent double-spending in an environment without central oversight. Whereas a conventional ledger records the transfers of actual bills or promissory notes that exist apart from it, the blockchain is the only place that bitcoins can be said to exist in the form of unspent outputs of transactions.[11]

The unit of account of the bitcoin system is bitcoin. As of 2014, symbols used to represent bitcoin are BTC,[note 1] XBT,[note 2] and .[note 3][45]:2 Small amounts of bitcoin used as alternative units are millibitcoin (mBTC), microbitcoin (µBTC), and satoshi. Named in homage to bitcoin’s creator, a satoshi is the smallest amount within bitcoin representing 0.00000001 bitcoin, one hundred millionth of a bitcoin.[4] A millibitcoin equals to 0.001 bitcoin, one thousandth of bitcoin.[46] One microbitcoin equals to 0.000001 bitcoin, one millionth of a bitcoin. A microbitcoin is sometimes referred to as a bit.

Simplified chain of ownership.[39] In reality, a transaction can have more than one input and more than one output.

Ownership of bitcoins implies that a user can spend bitcoins associated with a specific address. To do so, a payer must digitally sign the transaction using the corresponding private key. Without knowledge of the private key, the transaction cannot be signed and bitcoins cannot be spent. The network verifies the signature using the public key.[11]:ch. 5

If the private key is lost, the bitcoin network will not recognize any other evidence of ownership;[13] the coins are then unusable, and thus effectively lost. For example, in 2013 one user claimed to have lost 7,500 bitcoins, worth $7.5 million at the time, when he accidentally discarded a hard drive containing his private key.[47]

A transaction must have one or more inputs.[29] For the transaction to be valid, every input must be an unspent output of a previous transaction. Every input must be digitally signed. The use of multiple inputs corresponds to the use of multiple coins in a cash transaction. A transaction can also have multiple outputs, allowing one to make multiple payments in one go. A transaction output can be specified as an arbitrary multiple of satoshi. As in a cash transaction, the sum of inputs (coins used to pay) can exceed the intended sum of payments. In such a case, an additional output is used, returning the change back to the payer.[29] Any input satoshis not accounted for in the transaction outputs become the transaction fee.[29]

Mining is a record-keeping service.[note 6] Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block.[50] Each block contains a cryptographic hash of the previous block,[50] using the SHA-256 hashing algorithm,[11]:ch. 7 which links it to the previous block[50]thus giving the blockchain its name.

In order to be accepted by the rest of the network, a new block must contain a so-called proof-of-work.[50] The proof-of-work requires miners to find a number called a nonce, such that when the block content is hashed along with the nonce, the result is numerically smaller than the network’s difficulty target.[11]:ch. 8 This proof is easy for any node in the network to verify, but extremely time-consuming to generate, as for a secure cryptographic hash, miners must try many different nonce values (usually the sequence of tested values is 0, 1, 2, 3, …[11]:ch. 8) before meeting the difficulty target.

Every 2016 blocks (approximately 14 days), the difficulty target is adjusted based on the network’s recent performance, with the aim of keeping the average time between new blocks at ten minutes. In this way the system automatically adapts to the total amount of mining power on the network.[11]:ch. 8

Between 1 March 2014 and 1 March 2015, the average number of nonces miners had to try before creating a new block increased from 16.4 quintillion to 200.5 quintillion.[51]

The proof-of-work system, alongside the chaining of blocks, makes modifications of the blockchain extremely hard, as an attacker must modify all subsequent blocks in order for the modifications of one block to be accepted.[52] As new blocks are mined all the time, the difficulty of modifying a block increases as time passes and the number of subsequent blocks (also called confirmations of the given block) increases.[50]

It has become common for miners to join mining pools,[53] which combine the computational resources of their members in order to increase the frequency of generating new blocks. The reward for each block is then split proportionately among the members, creating a more predictable stream of income for each miner without necessarily changing their long-term average income,[54] although a fee may be charged for the service.[55][56]

The rewards of mining have led to ever-more-specialized technology being utilized. The most efficient mining hardware makes use of custom designed application-specific integrated circuits, which outperform general-purpose CPUs while using less power.[57] As of 2015, a miner who is not using purpose-built hardware is unlikely to earn enough to cover the cost of the electricity used in their efforts, even if they are a member of a pool.[58]

In 2013, Mark Gimein estimated electricity use to be about 982 megawatt-hours a day, which could be used to power roughly 31,000 US homes.[59] In 2014, Karl J. O’Dwyer and David Malone estimated that specialized computers mining bitcoins required 0.1 to 10 GW of power.[60] As of 2015, The Economist estimated that even if all miners used modern facilities, the combined electricity consumption would be 1.46 terawatt-hours per year—equal to the consumption of about 135,000 American homes.[61] Bitcoin miners have set up in places like Iceland where geothermal energy is cheap and cooling Arctic air is free.[62]

The successful miner finding the new block is rewarded with newly created bitcoins and transaction fees.[63] As of 9 July 2016,[64] the reward amounted to 12.5 newly created bitcoins per block added to the blockchain. To claim the reward, a special transaction called a coinbase is included with the processed payments.[11]:ch. 8 All bitcoins in existence have been created in such coinbase transactions. The bitcoin protocol specifies that the reward for adding a block will be halved every 210,000 blocks (approximately every four years). Eventually, the reward will decrease to zero, and the limit of 21 million bitcoins[note 7]will be reached c. 2140; the record keeping will then be rewarded by transaction fees solely.[65]

In other words, bitcoin’s inventor Nakamoto set a monetary policy at the start of the bitcoin concept that there would only ever be 21 million bitcoins in total, their numbers being released roughly every ten minutes, and the rate at which they would be generated would drop by half every four years until all were in circulation.[66]

A wallet stores the information necessary to transact bitcoins. While wallets are often described as a place to hold[67] or store bitcoins,[68] due to the nature of the system, bitcoins are inseparable from the blockchain transaction ledger. A better way to describe a wallet is something that “stores the digital credentials for your bitcoin holdings”[68] and allows you to access (and spend) them. Bitcoin uses public-key cryptography, in which two cryptographic keys, one public and one private, are generated.[69] At its most basic, a wallet is a collection of these keys.

There are several types of wallets. Software wallets connect to the network and allow spending bitcoins in addition to holding the credentials that prove ownership.[70] Software wallets can be split further in two categories: full clients and lightweight clients.

Full clients verify transactions directly on a local copy of the blockchain (over 65 GB as of April 2016[71]). Because of its size / complexity, the entire blockchain is not suitable for all computing devices.

Lightweight clients on the other hand consult a full client to send and receive transactions without requiring a local copy of the entire blockchain (see simplified payment verification – SPV). This makes lightweight clients much faster to setup and allows them to be used on low-power, low-bandwidth devices such as smartphones. When using a lightweight wallet however, the user must trust the server to a certain degree. When using a lightweight client, the server can not steal bitcoins, but it can report faulty values back to the user. With both types of software wallets, the users are responsible for keeping their private keys in a secure place.[72]

Besides software wallets, Internet services called online wallets offer similar functionality but may be easier to use. In this case, credentials to access funds are stored with the online wallet provider rather than on the user’s hardware.[73][74] As a result, the user must have complete trust in the wallet provider. A malicious provider or a breach in server security may cause entrusted bitcoins to be stolen. An example of such security breach occurred with Mt. Gox in 2011.[75]

Physical wallets also exist and are more secure, as they store the credentials necessary to spend bitcoins offline.[68] Examples combine a novelty coin with these credentials printed on metal,[76] Others are simply paper printouts. Another type of wallet called a hardware wallet keeps credentials offline while facilitating transactions.[77]

The first wallet program was released in 2009 by Satoshi Nakamoto as open-source code.[17] Sometimes referred to as the “Satoshi client,” this is also known as the reference client because it serves to define the bitcoin protocol and acts as a standard for other implementations.[70] In version 0.5 the client moved from the wxWidgetsuser interface toolkit to Qt, and the whole bundle was referred to as Bitcoin-Qt.[70] After the release of version 0.9, the software bundle was renamed Bitcoin Core to distinguish itself from the network.[78][79] Today, other forks of Bitcoin Core exist such as Bitcoin XT and Bitcoin Classic.

Bitcoin is a pseudonymous currency, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. In addition, transactions can be linked to individuals and companies through “idioms of use” (e.g., transactions that spend coins from multiple inputs indicate that the inputs may have a common owner) and corroborating public transaction data with known information on owners of certain addresses.[80] Additionally, bitcoin exchanges, where bitcoins are traded for traditional currencies, may be required by law to collect personal information.[81]

To heighten financial privacy, a new bitcoin address can be generated for each transaction.[82] For example, hierarchical deterministic wallets generate pseudorandom“rolling addresses” for every transaction from a single seed, while only requiring a single passphrase to be remembered to recover all corresponding private keys.[83]Additionally, “mixing” and CoinJoin services aggregate multiple users’ coins and output them to fresh addresses to increase privacy.[84] Researchers at Stanford University and Concordia University have also shown that bitcoin exchanges and other entities can prove assets, liabilities, and solvency without revealing their addresses using zero-knowledge proofs.[85]

According to Dan Blystone, “Ultimately, bitcoin resembles cash as much as it does credit cards.”[86]

Wallets and similar software technically handle all bitcoins as equivalent, establishing the basic level of fungibility. Researchers have pointed out that the history of each bitcoin is registered and publicly available in the blockchain ledger, and that some users may refuse to accept bitcoins coming from controversial transactions, which would harm bitcoin’s fungibility.[87] Projects such as Zerocoin and Dark Wallet aim to address these privacy and fungibility issues.[88][89]

One of the first supporters, adopters, contributor to bitcoin and receiver of the first bitcoin transaction was programmer Hal Finney. Finney downloaded the bitcoin software the day it was released, and received 10 bitcoins from Nakamoto in the world’s first bitcoin transaction.[90][91]

Bitcoin’s ‘shadowy inventor’ Satoshi Nakamoto, is estimated to have mined 1 million bitcoins in the currency’s early days.[92]

Other early supporters were Wei Dai, creator of bitcoin predecessor b-money, and Nick Szabo, creator of bitcoin predecessor bit gold.[93]

Based on bitcoin’s open source code, other cryptocurrencies started to emerge in 2011.[26]

In March 2013, a technical glitch caused a fork in the blockchain, with one half of the network adding blocks to one version of the chain and the other half adding to another. For six hours two bitcoin networks operated at the same time, each with its own version of the transaction history. The core developers called for a temporary halt to transactions, sparking a sharp sell-off.[94]Normal operation was restored when the majority of the network downgraded to version 0.7 of the bitcoin software.[94]

In October 2013, Chinese internet giant Baidu had allowed clients of website security services to pay with bitcoins.[107] During November 2013, the China-based bitcoin exchange BTC China overtook the Japan-based Mt. Gox and the Europe-based Bitstamp to become the largest bitcoin trading exchange by trade volume.[108] On 19 November 2013, the value of a bitcoin on the Mt. Gox exchange soared to a peak of US$900 after a United States Senate committee hearing was told by the FBI that virtual currencies are a legitimate financial service.[109] On the same day, one bitcoin traded for over RMB¥6780 (US$1,100) in China.[110] On 5 December 2013, the People’s Bank of China prohibited Chinese financial institutions from using bitcoins.[111] After the announcement, the value of bitcoins dropped,[112] and Baidu no longer accepted bitcoins for certain services.[113] Buying real-world goods with any virtual currency has been illegal in China since at least 2009.[114]

The first bitcoin ATM was installed in October 2013 in Vancouver, British Columbia, Canada.[115]

With about 12 million existing bitcoins in November 2013,[116] the new price increased the market cap for bitcoin to at least US$7.2 billion.[117] By 23 November 2013, the total market capitalization of bitcoin exceeded US$10 billion for the first time.[118]

In the U.S., two men were arrested in January 2014 on charges of money-laundering using bitcoins; one was Charlie Shrem, the head of now defunct bitcoin exchange BitInstant and a vice chairman of the Bitcoin Foundation. Shrem allegedly allowed the other arrested party to purchase large quantities of bitcoins for use on black-market websites.[119]

In early February 2014, one of the largest bitcoin exchanges, Mt. Gox,[75] suspended withdrawals citing technical issues.[120] By the end of the month, Mt. Gox had filed for bankruptcy protection in Japan amid reports that 744,000 bitcoins had been stolen.[121] Months before the filing, the popularity of Mt. Gox had waned as users experienced difficulties withdrawing funds.[122]

On 18 June 2014, it was announced that bitcoin payment service providerBitPay would become the new sponsor of St. Petersburg Bowl under a two-year deal, renamed the Bitcoin St. Petersburg Bowl. Bitcoin was to be accepted for ticket and concession sales at the game as part of the sponsorship, and the sponsorship itself was also paid for using bitcoin.[123]

Less than one year after the collapse of Mt. Gox, United Kingdom-based exhange Bitstamp announced that their exchange would be taken offline while they investigate a hack which resulted in about 19,000 bitcoins (equivalent to roughly US$5 million at that time) being stolen from their hot wallet.[124] The exchange remained offline for several days amid speculation that customers had lost their funds. Bitstamp resumed trading on 9 January after increasing security measures and assuring customers that their account balances would not be impacted.[125]

The bitcoin exchange service Coinbase launched the first regulated bitcoin exchange in 25 US states on 26 January 2015. At the time of the announcement, CEO Brian Armstrong stated that Coinbase intends to expand to thirty countries by the end of 2015.[126] A spokesperson for Benjamin M. Lawsky, the superintendent of New York state’s Department of Financial Services, stated that Coinbase is operating without a license in the state of New York. Lawsky is responsible for the development of the so-called ‘BitLicense‘, which companies need to acquire in order to legally operate in New York.[127]

In August 2015 it was announced that Barclays would become the first UK high street bank to start accepting bitcoin, with the bank revealing that it plans to allow users to make charitable donations using the currency.[128]

A major bitcoin exchange, Bitfinex, was hacked and nearly 120,000 BTC (around $60m) was stolen in 2016.[129]

According to the director of the Institute for Money, Technology and Financial Inclusion at the University of California-Irvine there is “an unsettled debate about whether bitcoin is a currency”.[130] Bitcoin is commonly referred to with terms like: digital currency,[13]:1digital cash,[131]virtual currency,[4]electronic currency,[40] or cryptocurrency.[130] Its inventor,[17] Satoshi Nakamoto, used the term electronic cash.[39] Bitcoins have three useful qualities in a currency, according to The Economistin January 2015: they are “hard to earn, limited in supply and easy to verify”.[61] Economists define money as a store of value, a medium of exchange, and a unit of account and agree that bitcoin has some way to go to meet all these criteria.[132] It does best as a medium of exchange, as of February 2015 the number of merchants accepting bitcoin has passed 100,000.[30] As of March 2014, the bitcoin market suffered from volatility, limiting the ability of bitcoin to act as a stable store of value, and retailers accepting bitcoin use other currencies as their principal unit of account.[132]

Bitcoins can be bought and sold both on- and offline. Participants in online exchanges offer bitcoin buy and sell bids. Using an online exchange to obtain bitcoins entails some risk, and, according to a study published in April 2013, 45% of exchanges fail and take client bitcoins with them.[145] Exchanges have since implemented measures to provide proof of reserves in an effort to convey transparency to users.[146][147] Offline, bitcoins may be purchased directly from an individual[148] or at a bitcoin ATM.[149]Bitcoin machines are not however traditional ATMs. Bitcoin kiosks are machines connected to the Internet, allowing the insertion of cash in exchange for bitcoins. Bitcoin kiosks do not connect to a bank and may also charge transaction fees as high as 7% and exchange rates $50 over rates from elsewhere.[150]

Attempting to explain the high volatility, a group of Japanese scholars stated that there is no stabilization mechanism.[152] The Bitcoin Foundation contends that high volatility is due to insufficient liquidity,[153] while a Forbes journalist claims that it is related to the uncertainty of its long-term value,[154] and the high volatility of a startup currency makes sense, “because people are still experimenting with the currency to figure out how useful it is.”[155]

There are uses where volatility does not matter, such as online gambling, tipping, and international remittances.[155] As of 2014, pro-bitcoin venture capitalists argued that the greatly increased trading volume that planned high-frequency trading exchanges would generate is needed to decrease price volatility.[156]

The price of bitcoins has gone through various cycles of appreciation and depreciation referred to by some as bubbles and busts.[157][158] In 2011, the value of one bitcoin rapidly rose from about US$0.30 to US$32 before returning to US$2.[159] In the latter half of 2012 and during the 2012–13 Cypriot financial crisis, the bitcoin price began to rise,[160] reaching a high of US$266 on 10 April 2013, before crashing to around US$50.[161] On 29 November 2013, the cost of one bitcoin rose to the all-time peak of US$1,242.[162] In 2014, the price fell sharply, and as of April remained depressed at little more than half 2013 prices. As of August 2014 it was under US$600.[163] In January 2015, noting that the bitcoin price had dropped to its lowest level since spring 2013 – around US$224 – The New York Times suggested that “[w]ith no signs of a rally in the offing, the industry is bracing for the effects of a prolonged decline in prices. In particular, bitcoin mining companies, which are essential to the currency’s underlying technology, are flashing warning signs.”[164] Also in January 2015, Business Insider reported that deep web drug dealers were “freaking out” as they lost profits through being unable to convert bitcoin revenue to cash quickly enough as the price declined – and that there was a danger that dealers selling reserves to stay in business might force the bitcoin price down further.[165]

On 4 November 2015, bitcoin had risen by more than 20%, exceeding $490. The Financial Times associated the rapid growth with the popularity of “socio-financial networks” MMM operated by Russian businessman Sergei Mavrodi.[166]

According to The Wall Street Journal, as of April 2016, bitcoin is starting to look slightly more stable than gold.[167]

Bitcoin has been labelled a speculative bubble by many including former Fed ChairmanAlan Greenspan[168] and economist John Quiggin.[169]Nobel Memorial Prizelaureate Robert Shiller said that bitcoin “exhibited many of the characteristics of a speculative bubble”.[170] Two lead software developers of bitcoin, Gavin Andresen[171]and Mike Hearn,[172] have warned that bubbles may occur. David Andolfatto, a vice president at the Federal Reserve Bank of St. Louis, stated, “Is bitcoin a bubble? Yes, if bubble is defined as a liquidity premium.” According to Andolfatto, the price of bitcoin “consists purely of a bubble,” but he concedes that many assets have prices that are greater than their intrinsic value.[49]:21 Journalist Matthew Boesler rejects the speculative bubble label and sees bitcoin’s quick rise in price as nothing more than normal economic forces at work.[173] The Washington Post pointed out that the observed cycles of appreciation and depreciation don’t correspond to the definition of speculative bubble.[159]

Various journalists,[174][62] economists,[175][176] and the central bank of Estonia[177] have voiced concerns that bitcoin is a Ponzi scheme.[178]Eric Posner, a law professor at the University of Chicago, stated in 2013 that “a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion.”[179] In 2014 reports by both the World Bank and the Swiss Federal Council examined the concerns and came to the conclusion that bitcoin is not a Ponzi scheme.[180]:7[181]:21However, bitcoin is still ‘a little bit’ of a Ponzi sceme or pyramid scheme according to some mainstream writers such as Matt O Brien of the Washington Post who said its early adopters are trying to cash in on the idea of getting more people involved, driving the bitcoin price up and increasing their funds.[182][183][184]

Financial journalists and analysts, economists, and investors have attempted to predict the possible future value of bitcoin. In April 2013, economist John Quigginstated, “bitcoins will attain their true value of zero sooner or later, but it is impossible to say when”.[169] A similar forecast was made in November 2014 by economist Kevin Dowd.[185]

In December 2013, finance professor Mark T. Williams forecast a bitcoin would be worth less than $10 by July 2014.[186] In the indicated period bitcoin has exchanged as low as $344 (April 2014) and during July 2014 the bitcoin low was $609.[48][187] In December 2014, Williams said, “The probability of success is low, but if it does hit, the reward will be very large.”[188]

In November 2014, David Yermack, Professor of Finance at New York University Stern School of Business, forecast that in November 2015 bitcoin may be all but worthless.[189] In the indicated period bitcoin has exchanged as low as $176.50 (January 2015) and during November 2015 the bitcoin low was $309.90.[48]

In May 2013, Bank of America FX and Rate Strategist David Woo forecast a maximum fair value per bitcoin of $1,300.[190]

The “death” of bitcoin has been proclaimed numerous times.[191] One journalist has recorded 29 such “obituaries” as of early 2015.[191]

Forbes magazine declared bitcoin “dead” in June 2011,[192] followed by Gizmodo Australia in August 2011.[193]Wired magazine wrote it had “expired” in December 2012.[194]Ouishare Magazine declared, “game over, bitcoin” in May 2013,[195] and New York Magazine stated bitcoin was “on its path to grave” in June 2013.[196]Reuters published an “obituary” for bitcoin in January 2014.[197]Street Insider declared bitcoin “dead” in February 2014,[198] followed by The Weekly Standard in March 2014,[199]Salon in March 2014,[200]Vice News in March 2014,[201] and Financial Times in September 2014.[202] In January 2015, USA Today states bitcoin was “headed to the ash heap”,[203] and The Telegraph declared “the end of bitcoin experiment”.[204] In January 2016, former bitcoin developer Mike Hearn called bitcoin a “failed project”.[205]

Peter Greenhill, Director of E-Business Development for the Isle of Man, commenting on the obituaries paraphrased Mark Twain saying “reports of bitcoin’s death have been greatly exaggerated”.[206]

David Andolfatto, Vice President at the Federal Reserve Bank of St. Louis, stated that bitcoin is a threat to the establishment, which he argues is a good thing for the Federal Reserve System and other central banks because it prompts these institutions to operate sound policies.[49]:33[209][210]

Free software movement activist Richard Stallman has criticized the lack of anonymity and called for reformed development.[211]PayPal President David A. Marcus calls bitcoin a “great place to put assets” but claims it will not be a currency until price volatility is reduced.[212]Bill Gates, in relation to the cost of moving money from place to place in an interview for Bloomberg L.P. stated: “Bitcoin is exciting because it shows how cheap it can be.”[213]

Officials in countries such as Brazil,[214] the Isle of Man,[215]Jersey,[216] the United Kingdom,[217] and the United States[35] have recognized its ability to provide legitimate financial services. Recent bitcoin developments have been drawing the interest of more financially savvy politicians and legislators as a result of bitcoin’s capability to eradicate fraud, simplify transactions, and provide transparency, when bitcoins are properly utilized.[218][219][220]

Bitcoins are accepted in this café in Delft in the Netherlands as of 2013

In 2015, the number of merchants accepting bitcoin exceeded 100,000.[30] Instead of 2–3% typically imposed by credit cardprocessors, merchants accepting bitcoins often pay fees in the range from 0% to less than 2%.[31] As of December 2014 select firms that accept payments in bitcoin include:[note 10]

The businesses Dell, Reddit, Expedia, PayPal, and most recently Microsoft do not technically accept bitcoin. Instead, they partner with a middleman—generally either Coinbase or BitPay who then take a customer’s bitcoin and immediately convert it into cash and then deposit the cash in the company’s bank account. In other words, Dell, Expedia, Microsoft, and Time Inc., do not ‘actually accept bitcoins, per se.’ They accept U.S. dollars and it’s their ‘bitcoin processing partners who accept bitcoin.’ ‘They then make money on transaction fees (in the case of Coinbase), or by selling their software and services as a subscription (in the case of BitPay).’[253]

Bitcoin ATM in The D Las Vegas Casino. An early retail adopter of bitcoin

Due to the design of bitcoin, all retail figures are only estimates.[32][254] According to Tim Swanson, head of business development at a Hong Kong-based cryptocurrency technology company, in 2014, daily retail purchases made with bitcoin were worth about $2.3 million.[254] He estimates that, as of February 2015, fewer than 5,000 bitcoins per day (worth roughly $1.2 million at the time) were being used for retail transactions,[32] and concluded that in 2014 “it appears there has been very little if any increase in retail purchases using bitcoin.”[32]

Bitcoin companies have had difficulty opening traditional bank accounts because lenders have been leery of bitcoin’s links to illicit activity.[255] According to Antonio Gallippi, a co-founder of BitPay, “banks are scared to deal with bitcoin companies, even if they really want to”.[256] In 2014, the National Australia Bank closed accounts of businesses with ties to bitcoin,[257] and HSBCrefused to serve a hedge fund with links to bitcoin.[258] Australian banks in general have been reported as closing down bank accounts of operators of businesses involving the currency;[259] this has become the subject of an investigation by the Australian Competition and Consumer Commission.[259] Nonetheless, Australian banks have keenly adopted the blockchain technology on which bitcoin is based.[260]

In a 2013 report, Bank of America Merrill Lynch stated that “we believe bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers.”[261]

In June 2014, the first bank that converts deposits in currencies instantly to bitcoin without any fees was opened in Boston.[262]

Some Argentinians have bought bitcoins to protect their savings against high inflation or the possibility that governments could confiscate savings accounts.[81] During the 2012–2013 Cypriot financial crisis, bitcoin purchases in Cyprus rose due to fears that savings accounts would be confiscated or taxed.[263] Other methods of investment are bitcoin funds. The first regulated bitcoin fund was established in Jersey in July 2014 and approved by the Jersey Financial Services Commission.[264] Also, c. 2012 an attempt was made by the Winklevoss twins (who in April 2013 claimed they owned nearly 1% of all bitcoins in existence[265]) to establish a bitcoin ETF.[266] As of early 2015, they have announced plans to launch a New York-based bitcoin exchange named Gemini,[267] which has received approval to launch on 5 October 2015.[268] On 4 May 2015, Bitcoin Investment Trust started trading on the OTCQX market as GBTC.[269] Forbes started publishing arguments in favor of investing in December 2015.[270]

To improve access to price information and increase transparency, on 30 April 2014 Bloomberg LP announced plans to list prices from bitcoin companies Kraken and Coinbase on its 320,000 subscription financial data terminals.[156][275] In May 2015, Intercontinental Exchange Inc., parent company of the New York Stock Exchange, announced a bitcoin index initially based on data from Coinbase transactions.[276]

Venture capitalists, such as Peter Thiel‘s Founders Fund, which invested US$3 million in BitPay, do not purchase bitcoins themselves, instead funding bitcoin infrastructure like companies that provide payment systems to merchants, exchanges, wallet services, etc.[277] In 2012, an incubator for bitcoin-focused start-ups was founded by Adam Draper, with financing help from his father, venture capitalist Tim Draper, one of the largest bitcoin holders after winning an auction of 30,000 bitcoins,[278] at the time called ‘mystery buyer’.[279] The company’s goal is to fund 100 bitcoin businesses within 2–3 years with $10,000 to $20,000 for a 6% stake.[278]Investors also invest in bitcoin mining.[280] According to a 2015 study by Paolo Tasca, bitcoin startups raised almost $1 billion in three years (Q1 2012 – Q1 2015).[281]

Bitcoin appeals to tech-savvy libertarians, because it so far exists outside the institutional banking system and the control of governments.[284] However, researchers looking to uncover the reasons for interest in bitcoin did not find evidence in Google search data that this was linked to libertarianism.[285]

Bitcoin’s appeal reaches from left wing critics, “who perceive the state and banking sector as representing the same elite interests, […] recognising in it the potential for collective direct democratic governance of currency”[286] and socialists proposing their “own states, complete with currencies”,[287] to right wing critics suspicious of big government, at a time when activities within the regulated banking system were responsible for the severity of the financial crisis of 2007–08,[288] “because governments are not fully living up to the responsibility that comes with state-sponsored money”.[289] Bitcoin has been described as “remov[ing] the imbalance between the big boys of finance and the disenfranchised little man, potentially allowing early adopters to negotiate favourable rates on exchanges and transfers – something that only the very biggest firms have traditionally enjoyed”.[290] Two WSJ journalists describe bitcoin in their book as “about freeing people from the tyranny of centralised trust”.[291]

As a decentralised means of payment with no territorial attachment or governmental connection, bitcoin has no borders. Therefore, bitcoin is difficult to control and states lack coordinated measures of control of bitcoin. The competent authorities, notably the European Banking Authority (EBA), or the Swiss Federal Council, have issued ‘warnings to the users of virtual currencies.’ The EBA’s warning explains virtual currencies and associated risks for users. Most of the responsibility in dealing with bitcoin ‘lies with the users themselves.’ ‘Without optimal protection of their wallets and data carriers such as computers, laptops, smartphones, etc., they risk losing their bitcoin balances or becoming victims of abuse. The Federal Council therefore recommends that relevant public authorities and organizations, notably consumer protection organizations, warn users to exercise caution when using bitcoin.’[181]

The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.[292]

In April 2013, Steven Strauss, a Harvard public policy professor, suggested that governments could outlaw bitcoin,[293] and this possibility was mentioned again by a bitcoin investment vehicle in a July 2013 report to a regulator.[266] However, the vast majority of nations have not done so as of 2014. It is illegal in Bangladesh,[294]Bolivia,[295] Ecuador.[296]

In China in December 2013 the Chinese government declared that “bitcoin is not a currency and should not be circulated and used in the market as a currency.” ‘While people there are free to buy and sell it, financial institutions have been warned away’.[297]

The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies, law enforcement, and the media.[34] The FBI prepared an intelligence assessment,[36] the SEC has issued a pointed warning about investment schemes using virtual currencies,[34] and the U.S. Senate held a hearing on virtual currencies in November 2013.[35]

Several news outlets have asserted that the popularity of bitcoins hinges on the ability to use them to purchase illegal goods.[298][299] In 2014, researchers at the University of Kentucky found “robust evidence that computer programming enthusiasts and illegal activity drive interest in bitcoin, and find limited or no support for political and investment motives.”[285]

Bitcoin is transparent in its reporting of how much gets transferred and when, but lacks over-site about reporting suspicious activities in comparison to the regulated banking system. Bitcoin provides ‘cover’ to ‘move money around without triggering the usual alarm bells associated with giant transfers of cash.’ Jennifer Shasky Calvery, former head of the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), an agency that fights money laundering and terrorist finance, has stated that ‘powerful payment technologies could facilitate bad actors.’ She stated that “What keeps me up at night when I am thinking about digital currency…the real threats out there, these days we’re thinking a lot about ISIL,” Calvery said. “How they’re moving their money, and how potential US-based individuals are becoming foreign fighters: Are they moving their money, can we identify them from the movement of their money? What does it mean if they start moving their money through bitcoin? We’ve started to see some public articles suggesting that has occurred.” [300]

There have been many cases of bitcoin theft.[69] One way this is accomplished involves a third party accessing the private key to a victim’s bitcoin address,[301] or of an online wallet.[302] If the private key is stolen, all the bitcoins from the compromised address can be transferred. In that case, the network does not have any provisions to identify the thief, block further transactions of those stolen bitcoins, or return them to the legitimate owner.[266]

Theft also occurs at sites where bitcoins are used to purchase illicit goods. In late November 2013, an estimated $100 million in bitcoins were allegedly stolen from the online illicit goods marketplace Sheep Marketplace, which immediately closed.[303] Users tracked the coins as they were processed and converted to cash, but no funds were recovered and no culprits identified.[303] A different black market, Silk Road 2, stated that during a February 2014 hack, bitcoins valued at $2.7 million were taken from escrow accounts.[304]

Sites where users exchange bitcoins for cash or store them in “wallets” are also targets for theft. Inputs.io, an Australian wallet service, was hacked twice in October 2013 and lost more than $1 million in bitcoins.[305] In late February 2014 Mt. Gox, one of the largest virtual currency exchanges, filed for bankruptcy in Tokyo amid reports that bitcoins worth $350 million had been stolen.[121] Flexcoin, a bitcoin storage specialist based in Alberta, Canada, shut down on March 2014 after saying it discovered a theft of about $650,000 in bitcoins.[306] Poloniex, a digital currency exchange, reported on March 2014 that it lost bitcoins valued at around $50,000.[307] In January 2015 UK-based bitstamp, the third busiest bitcoin exchange globally, was hacked and $5 million in bitcoins were stolen.[308] February 2015 saw a Chinese exchange named BTER lose bitcoins worth nearly $2 million to hackers.[309]

A major bitcoin exchange, Bitfinex, was hacked and nearly 120,000 bitcoins (around $60m) was stolen in 2016. Bitfinex was forced to suspend its trading. The theft is the second largest bitcoin heist ever, dwarfed only by Mt. Gox theft in 2014. According to Forbes, “All of Bitfinex’s customers,… will stand to lose money. The company has announced a haircut of 36.067% across the board.”[129]

A CMU researcher estimated that in 2012, 4.5% to 9% of all transactions on all exchanges in the world were for drug trades on a single deep web drugs market, Silk Road.[310] Child pornography,[311] murder-for-hire services,[312] and weapons[313] are also allegedly available on black market sites that sell in bitcoin. Due to the anonymous nature and the lack of central control on these markets, it is hard to know whether the services are real or just trying to take the bitcoins.[314]

Several deep web black markets have been shut by authorities. In October 2013 Silk Road was shut down by U.S. law enforcement[315][316][317] leading to a short-term decrease in the value of bitcoin.[318] In 2015, the founder of the site was sentenced to life in prison.[319] Alternative sites were soon available, and in early 2014 the Australian Broadcasting Corporation reported that the closure of Silk Road had little impact on the number of Australians selling drugs online, which had actually increased.[320] In early 2014, Dutch authorities closed Utopia, an online illegal goods market, and seized 900 bitcoins.[321] In late 2014, a joint police operation saw European and American authorities seize bitcoins and close 400 deep web sites including the illicit goods market Silk Road 2.0.[322] Law enforcement activity has resulted in several convictions. In December 2014, Charlie Shrem was sentenced to two years in prison for indirectly helping to send $1 million to the Silk Road drugs site,[323] and in February 2015, its founder, Ross Ulbricht, was convicted on drugs charges and faces a life sentence.[324]

Some black market sites may seek to steal bitcoins from customers. The bitcoin community branded one site, Sheep Marketplace, as a scam when it prevented withdrawals and shut down after an alleged bitcoins theft.[325] In a separate case, escrow accounts with bitcoins belonging to patrons of a different black market were hacked in early 2014.[304]

According to the Internet Watch Foundation, a UK-based charity, bitcoin is used to purchase child pornography, and almost 200 such websites accept it as payment. Bitcoin isn’t the sole way to purchase child pornography online, as Troels Oertling, head of the cybercrime unit at Europol, states, “Ukash and Paysafecard… have [also] been used to pay for such material.” However, the Internet Watch Foundation lists around 30 sites that exclusively accept bitcoins.[311] Some of these sites have shut down, such as a deep web crowdfunding website that aimed to fund the creation of new child porn.[326][better source needed] Furthermore, hyperlinks to child porn websites have been added to the blockchain as arbitrary data can be included when a transaction is made.[327][328]

Bitcoins may not be ideal for money laundering because all transactions are public.[329] Authorities, including the European Banking Authority[33] the FBI,[36] and the Financial Action Task Force of the G7[330] have expressed concerns that bitcoin may be used for money laundering. In early 2014, an operator of a U.S. bitcoin exchange was arrested for money laundering.[119] A report by UK’s Treasury and Home Office named “UK national risk assessment of money laundering and terrorist financing” (2015 October) found that, of the twelve methods examined in the report, bitcoin carries the lowest risk of being used for money laundering, with the most common money laundering method being the banks.[331]

In a Ponzi scheme that utilized bitcoins, The Bitcoin Savings and Trust promised investors up to 7 percent weekly interest, and raised at least 700,000 bitcoins from 2011 to 2012.[332] In July 2013 the U.S. Securities and Exchange Commission charged the company and its founder in 2013 “with defrauding investors in a Ponzi scheme involving bitcoin”.[332] In September 2014 the judge fined Bitcoin Savings & Trust and its owner $40 million for operating a bitcoin Ponzi scheme.[333]

Bitcoin-related malware includes software that steals bitcoins from users using a variety of techniques, software that uses infected computers to mine bitcoins, and different types of ransomware, which disable computers or prevent files from being accessed until some payment is made. Security company Dell SecureWorks said in February 2014 that it had identified almost 150 types of bitcoin malware.[334]

In June 2011, Symantec warned about the possibility that botnets could mine covertly for bitcoins.[335] Malware used the parallel processing capabilities of GPUs built into many modern video cards.[336] Although the average PC with an integrated graphics processor is virtually useless for bitcoin mining, tens of thousands of PCs laden with mining malware could produce some results.[337]

In mid-August 2011, bitcoin mining botnets were detected,[338] and less than three months later, bitcoin mining trojans had infected Mac OS X.[339]

In April 2013, electronic sports organization E-Sports Entertainment was accused of hijacking 14,000 computers to mine bitcoins; the company later settled the case with the State of New Jersey.[340]

German police arrested two people in December 2013 who customized existing botnet software to perform bitcoin mining, which police said had been used to mine at least $950,000 worth of bitcoins.[341]

For four days in December 2013 and January 2014, Yahoo! Europe hosted an ad containing bitcoin mining malware that infected an estimated two million computers.[342] The software, called Sefnit, was first detected in mid-2013 and has been bundled with many software packages. Microsoft has been removing the malware through its Microsoft Security Essentials and other security software.[343]

Several reports of employees or students using university or research computers to mine bitcoins have been published.[344]

Some malware can steal private keys for bitcoin wallets allowing the bitcoins themselves to be stolen. The most common type searches computers for cryptocurrency wallets to upload to a remote server where they can be cracked and their coins stolen.[345] Many of these also log keystrokes to record passwords, often avoiding the need to crack the keys.[345] A different approach detects when a bitcoin address is copied to a clipboard and quickly replaces it with a different address, tricking people into sending bitcoins to the wrong address.[346] This method is effective because bitcoin transactions are irreversible.

One virus, spread through the Pony botnet, was reported in February 2014 to have stolen up to $220,000 in cryptocurrencies including bitcoins from 85 wallets.[347]Security company Trustwave, which tracked the malware, reports that its latest version was able to steal 30 types of digital currency.[348]

A type of Mac malware active in August 2013, Bitvanity posed as a vanity wallet address generator and stole addresses and private keys from other bitcoin client software.[349] A different trojan for Mac OS X, called CoinThief was reported in February 2014 to be responsible for multiple bitcoin thefts.[349] The software was hidden in versions of some cryptocurrency apps on Download.com and MacUpdate.[349]

Another type of bitcoin-related malware is ransomware. One program called CryptoLocker, typically spread through legitimate-looking email attachments, encrypts the hard drive of an infected computer, then displays a countdown timer and demands a ransom, usually two bitcoins, to decrypt it.[350] Massachusetts police said they paid a 2 bitcoin ransom in November 2013, worth more than $1,300 at the time, to decrypt one of their hard drives.[351] Linkup, a combination ransomware and bitcoin mining program that surfaced in February 2014, disables internet access and demands credit card information to restore it, while secretly mining bitcoins.[350]

Various potential attacks on the bitcoin network and its use as a payment system, real or theoretical, have been considered. The bitcoin protocol includes several features that protect it against some of those attacks, such as unauthorized spending, double spending, forging bitcoins, and tampering with the blockchain. Other attacks, such as theft of private keys, require due care by users.[13][352][353][354][2][355][356]

Unauthorized spending is mitigated by bitcoin’s implementation of public-private key cryptography. For example; when Alice sends a bitcoin to Bob, Bob becomes the new owner of the bitcoin. Eve observing the transaction might want to spend the bitcoin Bob just received, but she cannot sign the transaction without the knowledge of Bob’s private key.[13]

A specific problem that an internet payment system must solve is double-spending, whereby a user pays the same coin to two or more different recipients. An example of such a problem would be if Eve sent a bitcoin to Alice and later sent the same bitcoin to Bob. The bitcoin network guards against double-spending by recording all bitcoin transfers in a ledger (the blockchain) that is visible to all users, and ensuring for all transferred bitcoins that they haven’t been previously spent.[13]:4

If Eve offers to pay Alice a bitcoin in exchange for goods and signs a corresponding transaction, it is still possible that she also creates a different transaction at the same time sending the same bitcoin to Bob. By the rules, the network accepts only one of the transactions. This is called a race attack, since there is a race which transaction will be accepted first. Alice can reduce the risk of race attack stipulating that she will not deliver the goods until Eve’s payment to Alice appears in the blockchain.[352]

A variant race attack (which has been called a Finney attack by reference to Hal Finney) requires the participation of a miner. Instead of sending both payment requests (to pay Bob and Alice with the same coins) to the network, Eve issues only Alice’s payment request to the network, while the accomplice tries to mine a block that includes the payment to Bob instead of Alice. There is a positive probability that the rogue miner will succeed before the network, in which case the payment to Alice will be rejected. As with the plain race attack, Alice can reduce the risk of a Finney attack by waiting for the payment to be included in the blockchain.[353]

Each block that is added to the blockchain, starting with the block containing a given transaction, is called a confirmation of that transaction. Ideally, merchants and services that receive payment in bitcoin should wait for at least one confirmation to be distributed over the network, before assuming that the payment was done. The more confirmations that the merchant waits for, the more difficult it is for an attacker to successfully reverse the transaction in a blockchain—unless the attacker controls more than half the total network power, in which case it is called a 51% attack.[354]

Along with transaction graph analysis, which may reveal connections between bitcoin addresses (pseudonyms),[2][355] there is a possible attack[356] which links a user’s pseudonym to its IP address. If the peer is using Tor, the attack includes a method to separate the peer from the Tor network, forcing them to use their real IP address for any further transactions. The attack makes use of bitcoin mechanisms of relaying peer addresses and anti-DoS protection. The cost of the attack on the full bitcoin network is under €1500 per month.[356]

While it is possible to store any digital file in the blockchain, the larger the transaction size, the larger any associated fees become.[357] Various items have been embedded, including URLs to child pornography, an ASCII art image of Ben Bernanke, material from the Wikileaks cables, prayers from bitcoin miners, and the original bitcoin whitepaper.[358]

In the fall of 2014, undergraduate students at the Massachusetts Institute of Technology (MIT) each received bitcoins worth $100 “to better understand this emerging technology”. The bitcoins were not provided by MIT but rather the MIT Bitcoin Club, a student-run club.[359][360]

In early 2015, the CNN series Inside Man featured an episode about bitcoin. Filmed in July 2014, it featured Morgan Spurlock living off of bitcoins for a week to figure out whether the world is ready for a new kind of money.[364]

Jump up ^Relative mining difficulty is defined as the ratio of the difficulty target on 9 January 2009 to the current difficulty target.

Jump up ^It is misleading to think that there is an analogy between gold mining and bitcoin mining. The fact is that gold miners are rewarded for producing gold, while bitcoin miners are not rewarded for producing bitcoins; they are rewarded for their record-keeping services.[49]

^ Jump up to: abVigna, Paul; Casey, Michael J. (January 2015). The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order (1 ed.). New York: St. Martin’s Press. ISBN978-1-250-06563-6.

Jump up ^Joshua Kopstein (12 December 2013). “The Mission to Decentralize the Internet”. The New Yorker. Retrieved 30 December 2014. The network’s “nodes”—users running the bitcoin software on their computers—collectively check the integrity of other nodes to ensure that no one spends the same coins twice. All transactions are published on a shared public ledger, called the “blockchain”

^ Jump up to: abBustillos, Maria (2 April 2013). “The Bitcoin Boom”. The New Yorker. Condé Nast. Retrieved 22 December 2013. Standards vary, but there seems to be a consensus forming around Bitcoin, capitalized, for the system, the software, and the network it runs on, and bitcoin, lowercase, for the currency itself.

Jump up ^Carter, Stephen L. (29 November 2013). “Building Better Bitcoins”. Bloomberg View. Bloomberg LP. Retrieved 25 May 2014. A principal knock on bitcoins has been the claim that they are inherently insecure. The principal defense has been that they are as secure as “real” currency.

Jump up ^“China’s Bitcoin Exchanges Say Banks Will Close Their Accounts”. Bloomberg. 10 April 2014. Retrieved 11 April 2014. The central bank will keep watching risks from Bitcoin, which is fundamentally not a currency but an investment target, Sheng Songcheng, head of the monetary authority’s statistics department, told reporters in Beijing on Jan. 15 2014.

Jump up ^Andolfatto, David (24 December 2013). “In gold we trust?”. MacroMania. David Andolfatto. Retrieved 17 April 2014. Also, note that I am not against gold or bitcoin (or whatever) as a currency. In fact, I think that the threat that they pose as alternate currency can serve as a useful check on a central bank.

Jump up ^Christin, Nicolas (2013). Traveling the Silk Road: A Measurement Analysis of a Large Anonymous Online Marketplace (PDF). Carnegie Mellon INI/CyLab. p. 8. Retrieved 22 October 2013. we suggest to compare the estimated total volume of Silk Road transactions with the estimated total volume of transactions at all Bitcoin exchanges (including Mt.Gox, but not limited to it). The latter corresponds to the amount of money entering and leaving the Bitcoin network, and statistics for it are readily available… approximately 1,335,580 BTC were exchanged on Silk Road… approximately 29,553,384 BTC were traded in Bitcoin exchanges over the same period… The only conclusion we can draw from this comparison is that Silk Road-related trades could plausibly correspond to 4.5% to 9% of all exchange trades

Jump up ^Paul Vigna (18 February 2014). “BitBeat: Mt. Gox’s Pyrrhic Victory”. Money Beat. The Wall Street Journal. Retrieved 30 September 2014. ‘Ode to Satoshi’ is a bluegrass-style song with an old-timey feel that mixes references to Satoshi Nakamoto and blockchains (and, ahem, ‘the fall of old Mt. Gox’) with mandolin-picking and harmonicas.

Jump up ^…[E]very exchange between two beacons must be cryptographically signed by a third party bank in another star system: it take years to settle a transaction. It’s theft-proof too – for each bitcoin is cryptographically signed by the mind of its owner. Charles Stross. Neptune’s Brood (Kindle edition). Ace, 2013, p. 109 (reference; citation on the Google Books)

The Team Mini-MAX is a large family of single-seat, mid-wing, strut-braced, single engine aircraft, available in kit form for amateur construction. The first Mini-MAX had its first flight in 1984. Its name indicates its original design goals: a minimum-cost aircraft that requires a minimum of building space, time and skill, but which provides a maximum of enjoyment and performance.[1][2][3][4][5][6][7]

Contents

The Mini-MAX models are all predominantly constructed from wood truss with plywood gussets and covered with doped aircraft fabric. The construction time to complete a Mini-MAX varies depending on the model chosen. Many models feature open cockpits equipped with windshields. All versions feature a short-span wing of only 25 ft (7.6 m), except the V-MAX and 1600R EROS, which have a 26.5 ft (8.1 m) wingspan. The wing and horizontal stabilizer are both strut-braced: the wing is braced to the landing gear and the tail is braced from the horizontal tail surface to the fin. All models have conventional landing gear, with wheel pants as an option. Since the wing is braced to the mainwheels and the mainwheels are connected by a rigid axle, the pneumatic tires provide the only suspension.[5][6]

The aircraft was originally intended to meet the requirements of the US FAR 103 Ultralight Vehicles category, including that category’s maximum 254 lb (115 kg) empty weight. The original ultralight models of the Mini-MAX were equipped with the 28 hp (21 kW) Rotax 277 engine to achieve acceptable empty weights. Today the 1030F MAX 103 and 1100F Mini-MAX achieve an acceptable FAR 103 empty weight if they are equipped with the 28 hp (21 kW) Hirth F-33 powerplant. Other models use heavier engines which place them in the US Experimental – Amateur-built category.[5][9][10]

The Mini-MAX was also developed into a high winged version, called the Hi-MAX. The two designs share much in the way of parts and design concept commonality.[11]

Single seat, open cockpit, mid-wing aircraft with the 28 hp (21 kW) Rotax 277. First flight 1993, out of production, replaced by the 1030F. Manufacturer claimed construction time 350 hours. 250 completed and flown by 2011.[1][2][3][4][5][7]

Single seat, open cockpit, mid-wing aircraft with the 40 hp (30 kW) Rotax 447 engine. First flight 1984, still in production. Manufacturer claimed construction time 250-300 hours. 600 completed and flown by 2011.[1][2][3][4][7][12]

1200Z Z-MAX

Single seat, open cockpit, mid-wing aircraft with the 45 hp (34 kW) Zenoah G-50 engine. First flight 1991, out of production. Manufacturer claimed construction time 350 hours. 124 completed and flown by 2001. As this is a US aircraft the name is pronounced “Zee-Max”.[1][3][4]

1300Z Z-MAX

Single seat, enclosed cockpit, mid-wing aircraft with the 45 hp (34 kW) Zenoah G-50 engine. First flight 1990, out of production. Manufacturer claimed construction time 400 hours. 231 completed and flown by 2001. As this is a US aircraft the name is pronounced “Zee-Max”.[1][3][4]

1500R Sport

Single seat, open cockpit, mid-wing aircraft with the 40 hp (30 kW) Rotax 447 engine. First flight 1987, still in production. Manufacturer claimed construction time 300-350 hours. 200 completed and flown by 2011.[1][2][3][4][7][13]